Court File and Parties
Court File No.: CV-10-100008 Date: 2017-03-14 Ontario Superior Court of Justice
Between: THE LAW SOCIETY OF UPPER CANADA Plaintiff/Applicant – and – LEE EDWARD FINGOLD Defendant/Respondent
Counsel: Dennis J. Reeve, for the Plaintiff/Applicant Lee Edward Fingold, Acting for Self
Heard: February 23, 2017
Reasons for Decision
CHARNEY J.:
Introduction
[1] On September 13, 2016 I released my reasons (now reported at 2016 ONSC 5684) finding the respondent Lee Edward Fingold in contempt of court for breaching or failing to comply with a court order dated September 2, 2010 prohibiting him from holding himself out as a legal person who may practice law or provide legal services or providing legal services in Ontario.
[2] In that decision I held that Mr. Fingold had breached the court order on two occasions.
[3] The first occurred in December 2011 when he arranged to have a charge/mortgage registered on a property on behalf of a “client”. Mr. Fingold provided this client with an opinion that a purported promissory note was sufficient legal authority for encumbering the title to property, and directed or instructed a real estate conveyance to register the mortgage/charge on behalf of his client. I concluded that Mr. Fingold engaged in conduct that involved the application of legal principles and legal judgment that falls within the general definition of s. 1(5) of the Law Society Act and specifically s. 1(6)1 by giving a person “advice with respect to the legal interests, rights or responsibilities of the person or of another person” and s. 1(6)2 by selecting or drafting on behalf of any person “a document that affects a person’s interests in or rights to or in real or personal property”.
[4] The second incident arose in January 2016 when Mr. Fingold purported to determine the quantum of money required to discharge two privately held residential mortgages and represented that he would arrange to register discharges of these mortgages without a lawyer. The final discharge was, however, arranged through a lawyer.
[5] I rejected Mr. Fingold’s argument that he was not infringing s. 26.1 of the Law Society Act because he was merely paying licenced paralegals or conveyancers to register the relevant documents. The evidence demonstrated that Mr. Fingold was giving advice with respect to legal interests, rights or responsibilities with respect to persons, and that the paralegals/conveyancers were relying upon and acting on Mr. Fingold’s advice. I found that Mr. Fingold was deliberately trying to circumvent the clear language of the September 2, 2010 court order.
[6] Following the direction of the Ontario Court of Appeal in Boily v. Carleton Condominium Corporation 145, 2014 ONCA 574, 121 O.R. (3d) 670, I bifurcated the hearing and considered submissions on penalty on February 23, 2017. In Boily the Court of Appeal indicated (at para. 121):
If a contempt finding is made, the matter is adjourned to provide the contemnor an opportunity to purge the contempt and prepare for the sentencing portion of the process. Any action undertaken by a contemnor to purge his or her contempt may serve as a mitigating factor in sentencing...
[7] Mr. Fingold has filed affidavits and called a character witness to support his position on penalty, and I have heard submissions from both parties with regard to the appropriate penalty.
Position of the LSUC
[8] The LSUC takes the position that penalty for contempt must take into account the history of the respondent’s conduct since his disbarment in January 1996. This history is set out in paras. 5 to 11 of my decision dated September 13, 2016, summarized below for ease of reference:
(a) On January 25, 1996, Convocation of the LSUC ordered the respondent disbarred, and he has not been a member of the LSUC or applied for readmission as a lawyer licensee or admission as a paralegal since that date.
(b) In 1997 the respondent was convicted of the criminal offence of fraud over $5,000 and sentenced to a 12 month term of imprisonment and ordered to pay restitution in the amount of $744,315.
(c) Since that date the respondent has been subject to various court orders in relation to his conducting real estate transactions in contravention of the Law Society Act, R.S.O. 1990, c. L.8. These orders include:
i. The Order of Boyko J. dated August 16, 2001 prohibiting the respondent from acting, holding himself out as, representing himself or practicing as a barrister or solicitor.
ii. The Order of Scott J. dated March 1, 2002, finding the respondent in contempt of the August 16, 2001 order and fining the respondent $5,000.
iii. The respondent’s appeal of the March 1, 2002, finding of contempt was dismissed by the Court of Appeal on January 21, 2004.
iv. The Order of Klowak J., dated August 16, 2005, finding the respondent in contempt of the August 16, 2001 order and prohibiting the respondent from “doing any real estate transactions” and “directly or indirectly” applying for or being in possession of a Teranet license”.
v. On September 2, 2010, Favert J. found the respondent guilty of 12 counts of violating s. 26.1 of the Law Society Act, including 4 counts of unlawfully providing legal services, 4 counts of unlawfully representing himself as a person who may provide legal services and 4 counts of unlawfully holding himself out as a person who may provide legal services. He was fined a total of $20,000 and placed on probation for 2 years.
vi. The order of Boswell J., dated September 2, 2010, prohibiting the respondent “from contravening the provisions of s. 26.1 of the Law Society Act…by holding himself out as, or representing himself to be, a person who may practice law or who may provide legal services in Ontario, or by practising law or by providing legal services in Ontario”.
(d) In May 2012 the LSUC brought a motion to find the respondent in contempt of Boswell J.’s September 2, 2010 order. On May 18, 2012, DiTomaso J. found the respondent in contempt of the order of Boswell J. for, inter alia, representing himself to be a paralegal, and ordered him to a term of 14 days imprisonment.
[9] The LSUC takes the position that this latest finding of contempt is indicative of the respondent’s continued pattern of flouting court orders by providing legal services to members of the public in relation to real estate transactions.
[10] The LSUC points to the respondent’s own affidavit where he states that he continues to “make a small livelihood arranging mortgages” and that he makes 2 or 3 such deals a month, thus indicating that the respondent has not purged his contempt but continues to engage in the same conduct that gave rise to the contempt finding in this decision.
[11] The LSUC takes the position that the respondent continues to be defiant and unrepentant, and that Mr. Fingold has not been deterred by previous court orders and penalties. The Court must consider the principle of escalation of consequences for repeated offending conduct until an effective deterrence is found.
[12] Accordingly, the LSUC has requested a penalty of a period of incarceration in the range of 9 to 12 months.
Position of Mr. Fingold
[13] Mr. Fingold takes the position that while he is repentant, he did not deliberately breach the September 2010 court order. He sincerely believed that his activities did not amount to providing “legal services” within the meaning of the Law Society Act. He states that the court does not have to be concerned with a repetition of this conduct because he is now very sick and has retired.
[14] He has provided affidavit evidence outlining his several very serious medical conditions, and states that he can no longer work more than an hour a day. All of his “clients’” legal matters have been referred to one of two lawyers. He takes over twenty different prescriptions and pharmaceuticals every day, and he is concerned that he will not obtain proper medical attention if he is incarcerated.
[15] Mr. Fingold testified that he was paid only a few hundred dollars for the work he did that resulted in the two findings of contempt, and that his conduct does not merit incarceration. He also stated that such work is, in any event, a thing of the past because his medical condition is such that he is no longer able to provide these services to clients.
[16] Mr. Fingold has proposed that if incarceration is appropriate he be given a term of house arrest so that he can meet his medical needs.
[17] He indicated that he was remorseful, and promised that there would not be a “next time”.
Principles of Sentencing for Contempt of Court
[18] Rule 60.11(5) of the Rules of Civil Procedure gives the Court broad discretion to fashion a remedy for contempt that may include orders that the contemnor:
(a) be imprisoned for such period and on such terms as are just;
(b) be imprisoned if the person fails to comply with a term of the order;
(c) pay a fine;
(d) do or refrain from doing an act;
(e) pay such costs as are just; and
(f) comply with any other order that the judge considers necessary.
[19] A number of recent decisions have reviewed the principles of sentencing in contempt proceedings: Astley v. Verdun, 2013 ONSC 6734, aff’d 2014 ONCA 668; Pronesti v. 1309395 Ontario Ltd., 2015 ONSC 1139 and 2363523 Ontario Inc. v Nowack, 2016 ONSC 2518, aff’d 2016 ONCA 951.
[20] These cases provide a useful summary of the relevant sentencing provisions (Astley at para. 16, citations omitted):
A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender: Criminal Code, s. 718.1…
A sentence should be increased or reduced to account for aggravating or mitigating factors surrounding the contempt or the contemnor: Criminal Code, s. 718.2(a)…
A sentence should be similar to sentences imposed on similar contemnors for similar contempts committed in similar circumstances: Criminal Code, s. 718.2(b)...
Sentences should denounce unlawful conduct, promote a sense of responsibility in the contemnor, and deter the contemnor and others from defying court orders: Criminal Code, s. 718…
The Court should consider sanctions other than jail: Criminal Code, s. 718(2)(d) and (e)...
[21] In addition, I adopt the following comments from Dunphy J. in 2363523 Ontario Inc. v Nowack, at paras. 68 – 74:
There are two primary purposes to be served in sentencing, and I must have regard to both in this case.
Firstly – and usually primarily - the objective of sentencing is to coerce the contemnor to comply with the orders in question...
… My primary objective in this case is to secure compliance as soon as possible and as effectively as possible with valid orders that have been made.
A second objective of sentencing is punishment. Punishment serves to denounce conduct that requires denouncing and thereby deter the contemnor specifically and others more generally who might contemplate breaches of court orders. There can be no toleration of a doctrine of “economic breach” of court orders. No party should ever seek to calculate whether it is “worth it” to breach an order to secure some other objective.
Our court system and the rule of law itself would not long survive if litigants considered themselves free to disobey court orders at will. If a party has disagreements or issues with an order that has been made, it must nevertheless be complied with unless validly stayed or reversed on appeal in accordance with the rules. There is no self-help after an order has been issued.
In considering the appropriate sentence in an individual case, I have had regard to the list of factors cited by Shaugnessy J. in Nelson Barbados Group Ltd. v. Cox, 2010 ONSC 569...The factors, listed at para. 25, are the following:
a. The nature of the contemptuous act;
b. Whether the contemnor has admitted his breach;
c. Whether the contemnor has tendered a formal apology to the Court;
d. Whether the breach was a single act or part of an on-going pattern of conduct in which there were repeated breaches;
e. Whether the breach occurred with the full knowledge and understanding of the contemnor such that it was a breach rather than a result of a mistake or misunderstanding; and
f. The extent to which the conduct of the contemnor has displayed defiance;
g. Whether the order was a private one affecting only the parties or whether some public benefit lies at its root.
Finally, I must consider whether incarceration is an appropriate remedy or whether some lesser remedy is sufficient and appropriate. In considering that question, I start with the proposition that incarceration for civil contempt is very much the exception and not the rule. The penalty selected must be proportional to the conduct and appropriate having regard to the principles to be applied.
Application of Sentencing Principles
[22] In this case the LSUC is acting to protect the public interest pursuant to its statutory responsibility under ss. 4.1 and 4.2 of the Law Society Act. Accordingly, public rights are engaged and the protection of the public is at the root of this contempt motion.
[23] The last time that Mr. Fingold was found in contempt of court in May 2012 he was sentenced to 14 days imprisonment. A second finding of contempt qualifies as an aggravating factor because it demonstrates a pattern of behaviour in which Mr. Fingold is attempting to circumvent the various court orders to which he has been subject over the years.
[24] In normal circumstances this would result in a penalty with an increased period of incarceration, although not the 9 to 12 months requested by the LSUC. The LSUC provided no cases in which a 9 to 12 month sentence was deemed appropriate for contempt of a single court order, even for a second finding of contempt of court. The cases that I have reviewed suggest that a doubling of the first period may be appropriate, with sentences ranging from 15 to 90 days for each order breached (see for example: 2363523 Ontario Inc. v. Nowack at para. 105).
[25] In G M Textiles v. Sidhu, 2016 ONSC 2055 Reid J. ordered five consecutive sentences of four months imprisonment for the breach of five court orders, and an additional month for breach of a sixth order, with the possibility of reduction if the contemnor purged his contempt by complying with an outstanding order. Reid J. stated (at para. 62):
On a global basis, the sentences total between 18 months and 21 months, less one day. I consider that to be in the upper range for contempt where, for the most part, compliance is no longer possible and the original purpose of the orders has become moot.
[26] In our case the impugned conduct is in the past and so no opportunity exists for the purging of contempt. On the other hand, this is not a case where the contemnor has permanently frustrated or defeated the purpose of the court order. The primary purpose of the penalty must be ensure that Mr. Fingold understands that he cannot continue to disregard “both the letter and the spirit of order” (Chirico v. Szalas, 2016 ONCA 586 at para. 54), as well as to punish him for seeking to obtain financial gain by offering legal services when he is prohibited from doing so.
[27] In this regard, while I am satisfied that Mr. Fingold’s repentance is sincere, I am also of the view that his failing health has forced him into retirement regardless of the sincerity of his remorse. Thus, whatever penalty I impose, the future public purpose of the order is likely to be met as much by Mr. Fingold’s health limitations as by the penalty. I am prepared to take him at his word that he is remorseful and that there “will not be a next time”.
[28] Taking into account the various factors listed by the courts, I am satisfied that this is not an appropriate case for incarceration. While Mr. Fingold’s conduct was in violation of the court order, he did not engage in financial fraud or misappropriation of funds, and his conduct does not, in my view, merit a custodial term as a penalty. This is not a case in which a prison sentence is needed to accomplish the objectives of the order or to achieve specific and general deterrence or to “protect the integrity of the administration of justice.”
[29] Nor would a term of house arrest accomplish anything in this case. From what I understand of his medical condition, Mr. Fingold is essentially confined to his home in any event, so a term of house arrest would be an empty symbolic gesture.
[30] In my opinion a fine is an appropriate sanction. Mr. Fingold engaged in these activities for financial gain, and the best way to ensure that he discontinues such conduct is to impose a financial penalty so that he understands that he cannot profit by seeking to circumvent the court’s orders.
[31] Taking into account the limited financial gain he attained from these transactions, and taking into account that this is his second time being found in contempt of court for the same court order, the appropriate penalty is a fine of $5,000.
Conclusion
[32] For the reasons provided, I impose a fine of $5,000 to be paid by Lee Edward Fingold to the Treasurer of Ontario, payable within 60 days.
Justice R.E. Charney Released: March 14, 2017